NewMarket Corporation (NEU)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	77,476	111,936	68,712	83,304	125,172
Short-term investments	US$ in thousands	—	-371,493	0	375,918	0
Receivables	US$ in thousands	—	—	—	—	—
Total current liabilities	US$ in thousands	374,478	364,164	423,887	725,087	312,455
Quick ratio		0.21	-0.71	0.16	0.63	0.40

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($77,476K + $—K + $—K) ÷ $374,478K
= 0.21

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio of less than 1 indicates that a company may have difficulty in meeting its short-term liabilities.

Analyzing the quick ratio of NewMarket Corporation over the past five years shows a fluctuating trend. As of December 31, 2020, the quick ratio was 0.40, indicating that the company had $0.40 in liquid assets available for every $1 of current liabilities.

By the end of 2021, the quick ratio had improved to 0.63, suggesting a stronger ability to cover short-term obligations. However, in December 2022, the quick ratio dropped sharply to 0.16, indicating a potential liquidity strain.

The quick ratio took a significant turn for the worse at the end of 2023, plummeting to -0.71. A quick ratio below zero implies that the company's current liabilities exceeded its quick assets, signaling a serious red flag for liquidity concerns.

By the end of 2024, there was a slight recovery in the quick ratio, reaching 0.21. While an improvement from the previous year, the ratio still signifies a limited ability to meet short-term obligations with available liquid assets.

Overall, the fluctuating quick ratio of NewMarket Corporation over the five-year period indicates varying levels of liquidity and highlights the importance of closely monitoring the company's ability to meet its short-term financial obligations.